BILS News and Press, SPDR Bloomberg Barclays 3-12 Month T-Bill From 02/05/23

Summary The question as to whether nominal spreads today are properly priced or not ultimately comes down to one thing, and that one thing is inflation. Year-on-year core inflation has been trending down since it hit a peak of 6.6 percent last September. Our expectation is that the ...

Summary Money supply growth fell again in December, falling even further into negative territory after turning negative in November for the first time in twenty-eight years. During December 2022, YOY growth in the money supply was at –2.4 percent. That's down from November's rate...

Summary One key element ahead is the probability that the ECB will hike by more than the Fed does in 2023. In the US, the spread between the 10yr yield and front-end rates is remarkably stretched, as can be gleaned from the deep inversion of the curve. We identify the US 10yr as bei...

Summary How many more Fed rate hikes to come? What the U.S. bond market is saying about the economy. Outlook for the US dollar. The U.S. Federal Reserve delivered a quarter-point hike in an effort to tamp down on inflation and signaled further increases at upco...

Summary The Fed's inflation fighting credibility is really on the line this year. The peak in inflation was mid-2022, and it's fallen a lot in the last six months and likely to keep falling. The long end of the yield curve is held in check to some extent by the Fed's stubbornness at...

Summary When the height of the entire Yield Curve is the 6-month Treasury Bill, you know that you are living in some very strange place. There are those that suggest that some kind of “pivot,” by the Fed is on the horizon. I am not in this camp, and do not expect to see th...

Summary SLQD offered a very poor return profile when we last covered it. Things have improved materially and you are now getting paid to buy the fund. We still prefer BILS for shorter term yield as we don't agree with what the markets are telegraphing. iShares 0-5 Year Investm...

Summary U.S. equity indexes, having declined sharply in 2022, are fighting the Fed as 2023 begins. The inverted yield curve argues for recession, and equities appear to have discounted a significant probability of at least a mild recession. The bottom line is that, unlike the last f...

Summary Bond investors have started the new year on a very upbeat tone. They seem convinced that the battle against inflation has already been won. The Fed might nudge rates up a bit more to stay on the safe side, but soon enough we’ll go back to a world of very low interest rate...

Summary Stocks don’t bottom until central banks have slashed short rates enough to drop them back below long, re-steepening the curve to positive sloping once more. HY bond prices typically bottom with equities once HY yield spreads have reached 800+ bps above similar-term treasu...